|
Where The Auto Insurance Premium Dollar Goes 2002–2003
In 2003 claims accounted for $76 of every $100 earned in private
passenger auto insurance in the US, down from $80 reported in 2002.
US auto premium dollar information for 2002 and 2003 is detailed
in Table 1.
US expenses—commissions, state premium taxes, general expenses—accounted
for 24% of the premium dollar for both years.
US investments added $7 to income in 2003, up from $6 in 2002.
The bottom line equates to about $4 in aftertax profit for every
$100 in premiums in the US in 2003. This is substantially higher
than the $1 aftertax profit realized in 2002.
Of note, US lawyers’ fees accounted for $12 out of every
$100 in premiums both years, split 50–50 between plaintiffs’
and defendants’ attorneys.
Theft continues to account for about 25% of all comprehensive claims
or 2% of premiums earned for private passenger auto insurance.
Table 2 shows where the revenue dollar goes for US private passenger
auto insurance for 2002 and 2003 in graphic form in terms of claims,
expenses and profits.
Source: Estimated by the Insurance Information Institute (III), based
on data from A.M. Best Co., Insurance Services Office, Inc., National
Association of Insurance Commissioners and Insurance Research Council
 |
The cost of owning and operating a vehicle
isn’t
budging much. It will cost an average of 56.1 cents per mile
to own and operate a car in 2005 compared to 56.2 cents in
2004.
($8,410 vs. $8,431 annually). The cost in 2000 was 49.1 cents
($7,363 for the year).
(AAA)
|
|
